Russian Rubble Recovers on Stronger Oil

Interest rate cuts, rallying oil prices and an easing of tensions with neighboring Ukraine: Russia couldn’t ask for a better combination perhaps to bring it back from the brink of economic crisis.

Last week the country’s central bank slashed interest rates by a 150 basis points to 12.5 percent amid a recovery in the Russian ruble and signs that inflation in the country had peaked.

“The ruble has been on a tear from very depressed levels and this has a lot to do with oil, which is a huge performer,” Joseph Dayan, head of markets at BCS Financial, told CNBC on Tuesday.

“Close to 60 percent of Russia’s budget is dependent on oil or oil-related income, so not surprisingly, both of these moves are going together. There are other things that are coming together for the Russian story – geopolitical factors in particular,” Dayan added.

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza